Biggest Heists in Bitcoin History and How They Were Pulled Off

Bitcoin’s history is rife with hacks and heists, sometimes resulting in six-figure bitcoin losses and businesses going bankrupt, unable to pay their customers back. A new video by Bitcoin.com explores the largest bitcoin heists in history and explains how each one was pulled off.

Lucrative Crime

With cryptocurrencies’ steep rise in value, heists have become increasingly lucrative for hackers. The biggest targets have so far been crypto exchanges with weak security measures. Since a large number of crypto users are still not holding their own private keys, opting to leave their coins on these exchanges, large and frequent heists are inevitable. Blockchain data forensics firm Chainalysis detailed in its January report:

The hacking of exchanges is far and away the most costly type of crypto crime, generating around $1 billion in hacking revenues in 2018 alone.

When considering “exchange thefts, fraud and exit scams,” blockchain security company Ciphertrace estimates that they “may tally more than $1.2 billion in the first quarter [2019] alone.”

As exchanges’ security measures tighten over time, the number of coins hackers are able to steal has been decreasing. As Chainalysis noted, “Crypto crime increased in 2018, but it made up a smaller slice of a much larger market. Indeed, according to our analysis, illicit transactions comprised less than 1% of all economic bitcoin activity in 2018, down from 7% in 2012.”

Biggest Heists and How They Were Pulled Off

The latest installment from Bitcoin.com’s new video series entitled “The 5 Biggest Bitcoin Heists in History – Ranked” examines the top bitcoin heists and a Ponzi scheme, and details how each one was executed. The heyday of cryptocurrency heists started in 2011, quickly peaked over the next two years, and has continued to this day. As described in the video, hackers were able to steal sums as large as 650,000 BTC, 120,000 BTC, and 100,000 BTC — to name a few.

Inevitably featured in the video is the Mt. Gox heist which saw 650,000 bitcoins stolen throughout 2013 by a still-unknown hacker. For years, victims of the hack blamed CEO Mark Karpeles for the theft, but Japanese courts eventually exonerated him of ill intention. Another major hack in Japan hit one of the largest crypto exchanges in the country; Coincheck was hacked last year for about 50,000 BTC worth of cryptocurrencies. The video tells the story of how it re-emerged and became one of the 19 fully registered crypto exchanges in Japan.

The largest Ponzi scheme to date is also featured in the video. Bitcoin Savings and Trust, operated by Trendon Shavers, stole approximately 265,675 BTC from its customers. Another high-profile heist was the 2016 Bitfinex hack, which lost about 120,000 BTC. The video explains what happened there as well.

The Curious Case of Bitcoinica

An interesting series of heists revolved around Bitcoinica, an early bitcoin exchange by a 17-year-old entrepreneur and coder named Zhou Tong. Hackers first exploited a vulnerability in shared online web host Linode and stole over 46,653 BTC from eight different Bitcoin services there in March 2012, including more than 43,000 coins from Bitcoinica.

Before Tong could pay back his customers, the exchange suffered a second attack. In May 2012, hackers managed to empty the exchange’s hot wallet and user funds at its new server host, Rackspace. The thieves got away with a total of 18,547 bitcoins this time, causing the fledgling exchange to shut down. Trouble continued for Bitcoinica, however, as a third heist hit two months later and 40,000 more coins belonging to the exchange and its users stored on Mt. Gox vanished. “A total of around 100,000 bitcoins were stolen before Bitcoinica closed its doors the same year,” the Bitcoin.com video notes.

For more information about the largest hacks in bitcoin history and how they were pulled off, see the video below.

What do you think of these heists? Let us know in the comments section below.

Images courtesy of Shutterstock.

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Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

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